As long as goods and services are available for the currency to purchase there is no inflationary pressure,
Yes, a loaf of bread is 10x more expensive than it was in the 60’s
These two statements are contradictory. I believe you are trying to say that inflation will remain within what you see as acceptable limits, but please do not claim that increasing the money supply does not cause inflation.
Inflation or deflation. Economies can deal with either as long as they are predictable. It is rapid shift that disrupt the structure of the economy. This does not mean they don’t have long term impacts. Constant inflation rewards debt, spending and consumption.
Steady mild deflation driven by increased productivity encourages savings and delayed consumption. In other words it encourages conservation.
Given concerns about humanities impact on the globe do we need a policy that encourages consumption?
The currency supply must keep up with economic growth or our position in trade becomes impossible to control. A strong currency means domestic workers can never compete without extreme tariffs and manipulation, which leads to isolationism.
1. Mercantilism, the policy you describe above, is a policy run by governments to reward special interests. I.e. firms and workers that profit from exports. While punishing the rest of society by forcing us to pay higher prices for goods produced in other countries. It is no different than tariffs.
2. Competitiveness in global markets is no different than across state lines. Yes a rapid change in the relative value of currencies can disrupt the structure of business. You are once again allowing currency to cloud your view of the flow of goods and service.
This is the reason I challenge you to think about barter. It forces people to look at reality, not currency.
Hope you are enjoying your weekend.
SMV